9 January 2008
MADRID – In times of uncertainty such as now, the stock markets become more demanding. Investors are more selective about the companies in which they place their trust. Yesterday’s session was a good example of this. By the end of day, there were as many stocks in the red as there were in the black and two unchanged in the Spanish blue-chip Ibex 35. As a result of this, the benchmark index ended flat, adding only 0.02 percent to close at 14,670.50 points.
Investors yesterday were particularly hard on the banks. The six lenders included in the Ibex 35 were among the worst-hit stocks yesterday. The financial and property crises are making investors a lot more reluctant to have any truck with anything to do with mortgages, the financial product at the core of the problem.
The initial push given by the electricity companies and Telefónica offset the falls in the banks, and allowed the Ibex 35 to move above 14,800 points at one point. Sentiment remained more upbeat until poor housing data out of the United States unsettled investors again.
The performance of the rest of the Spanish index confirmed the markets are being much more selective than in previous years. The Ibex Medium Cap dropped 0.61 percent, while the Ibex Small Cap shed 0.14 percent. In times of doubt, investors tend to opt for heavyweight and more liquid stocks.
Spain’s attempt to maintain the timid recovery seen in the previous session was on a par with the rest of Europe. However, other major European bourses held up better than Spain when the US economic indicators were released and managed to close with bigger gains.
Paris closed up 0.79 percent, Frankfurt put on 0.42 percent, while London gained 0.33 percent.
[Copyright EL PAÍS / Adrián Soto 2008]
Subject: Spanish news